H&M have reported high than expected profits stating sales increased at the end of the year. Net profits rose 18% to £276m in the three months to 30 November from £232m a year ago. December sales were up 16% from 2005 levels, and the company said it planned to open 170 new stores this year. H&M has been broadening its appeal by developing limited editions of clothes by celebrities including Madonna, and designers such as Stella McCartney, Karl Lagerfeld, and last autumn's pairing up with duo Viktor & Rolf.

The chain, which opened 60 years ago and made a name for itself by selling low-cost garments, also plans to start a high-end range and launch home textiles in the autumn, called Cos, or Collection of Style. Cos is to open in Regent Street in March, with a press campaign headed by Karla Otto. H&M further reported it was launch a home textile range, including bedding, curtains, towels and cushions, via online and catalogue sales. Analysts said the move was a good way to boost sales, and H&M shares rose by more than 5% on the earnings news.